Agenda item

To consider the review of Council tenant rents and housing related property charges.

That Full Council be recommended to authorise the Interim Director of Housing to adjust council rents and housing related charges with effect from 1 April 2024 as follows:

(1)     That the housing rental charges is increased by 7.7% which is the consumer price index 6.7% (September 2023) plus 1%, which is equivalent to a 7.7% increase.

(2)     That the housing service charges increase by the consumer price index (CPI)+ 1%, equivalent to a 7.7% increase.

(3)     That housing service charge is implemented on properties not currently being charged but are receiving the service in line with similar properties receiving the service provision, including heating, water and laundry facility following consultation with residents.

(4)     That subject to consultation with the residents of the site, to increase rent at the traveller’s pitch in Hills View, Tipton by 7.7%.

(5)     That rental charges for garage sites be increased in line with other council fees and charges agreed by Cabinet and Council.

(6)     That properties managed by Riverside under the Private Finance Initiative (PFI) agreement receive a 7.7% rental increase and a 7.7% increase in service charges to match the council’s rent and service charge increase.

(7)     That properties that sit outside the Housing Revenue Account (including service tenants for Parks, Sandwell Valley and Caretaking) receive a 7.7% increase in rental charges and service charges equivalent to CPI plus 1%.

(8)     That the leaseholder annual management fee be increased by 7.7%, CPI + 1% in 2024/25 from £115.66 to £124.57.

(9)     That the Director of Housing be authorised to implement adjustments to council rents and housing related charges as set out in this report with effect from 1 April 2024; and

(10)   That the Director of Housing be authorised to introduce associated service charges in respect of Building Safety Regulation requirements for Leasehold properties.

Approval was sought to adjust council rents and Housing Charges from 1 April 2024 by the consumer price index (CPI) (September 2023) plus 1%.

In 2019, the Government set a rent policy for social housing that would permit rents to increase by up to CPI plus 1% per annum and made clear its intention to leave this policy in place until 2025.

From 2020, the Council had control over its own rent setting in line with the Department for Levelling Up, Housing and Communities (DLUHC) Rents Standard, and Policy Statement on Rents for Social Housing.

Council tenants, leaseholders and other residents were to be notified of the rent and other related housing charges to take effect from the new financial year of 2024/ 25.

Reason for Decision

The council had to achieve the right balance between supporting tenants to mitigate the continued cost of living pressures and protecting the Housing Revenue Account (HRA) to ensure the council could continue to provide affordable social housing for Sandwell residents.

Alternative Options Considered

The Council could have increased rent below the rate of inflation or by a lower percentage. However, this would have created financial pressure for the Council to deliver key services. The provision of good quality Housing and Neighbourhoods were key to improving lives and life chances of residents. Reducing the level of income to the HRA would seriously impact the Councils 30- year business plans and result in less funding for maintenance of Council stock and funding for new homes.

The challenges presented through the Consumer Regulation Act and the Building Safety Act put financial pressures on the HRA to reshape the Councils services to meet the requirements.

(Councillor Hughes declared a pecuniary interest in this item on the basis that his spouse was a tenant of a Sandwell Council owned garage and subsequently took no part in the discussion and did not vote on this matter).